REG - British Land Co PLC - Half-year Report- Part 2 <Origin Href="QuoteRef">BLND.L</Origin> - Part 1

British LandAnnouncement

16/11/2016 07:07

RNS Number : 2740P
British Land Co PLC
16 November 2016
consolidated income statement
For the six months ended 30 September 2016



Six months ended 
30 September 2016
Unaudited

Six months ended 
30 September 2015
Unaudited2

Note

Underlying pre-tax1
m
Capital
and other
m
Total
m

Underlying pre-tax1
m
Capital
and other
m
Total
m
Revenue
3

288
9
297

293
15
308
Costs
3

(67)
(6)
(73)

(69)
(7)
(76)

3

221
3
224

224
8
232
Joint ventures and funds
(see also below)
8

68
(199)
(131)

63
219
282
Administrative expenses


(42)
-
(42)

(49)
-
(49)
Valuation movement 
4

-
(257)
(257)

-
397
397
Profit on disposal of investment properties and investments


-
27
27

-
26
26
Net financing costs









- financing income
5

2
32
34

3
4
7
- financing charges
5

(43)
(17)
(60) 

(62)
(10)
(72)



(41)
15
(26)

(59)
(6)
(65)
(Loss) profit on ordinary activities
before taxation


206
(411)
(205)

179
644
823
Taxation 
6

-
1
1

-
7
7
(Loss) profit for the period after taxation




(204)



830
Attributable to non-controlling interests


7
(16)
(9)

8
6
14
Attributable to shareholders
of the Company


199
(394)
(195)

171
645
816
Earnings per share:









- basic
2



(19.0)p



79.8p
- diluted
2



(20.3)p



75.4p
Alll results derive from continuing operations.



Six months ended 
30 September 2016
Unaudited

Six months ended 
30 September 2015
Unaudited

Note

Underlying pre-tax1
m
Capital
and other
m
Total
m

Underlying pre-tax1
m
Capital
and other
m
Total
m
Results of joint ventures and funds accounted for using the equity method









Underlying Profit 


68
-
68

63
-
63
Valuation movement
4

-
(205)
(205)

-
217
217
Capital financing costs


-
(6)
(6)

-
-
-
Profit on disposal of investment properties, trading properties
and investments


-
12
12

-
2
2
Taxation


-
-
-

-
-
-

8

68
(199)
(131)

63
219
282
1 See definition in glossary.
2 The prior period comparatives have been re-stated - see note 1. 
consolidated statement OF COMPREHENSIVE INCOME
For the six months ended 30 September 2016

Six months ended 30 September 2016
Unaudited
m
Six months ended 30 September 2015
Unaudited
m
(Loss) profit for the period after taxation
(204)
830
Other comprehensive (expense) income:


Items that will not be reclassified subsequently to profit or loss:


Net actuarial loss on pension scheme
(23)
(1)
Valuation movements on owner-occupied property
(2)
12

(25)
11
Items that may be reclassified subsequently to profit or loss:


(Losses) gains on cash flow hedges


- Group
(47)
8
- Joint ventures and funds
(3)
4
- Reclassification of items from the statement of comprehensive income
-
-

(50)
12
Transferred to the income statement (cash flow hedges)


- Foreign currency derivatives
-
2
- Interest rate derivatives
10
4

10
6
Exchange differences on translation of foreign operations


- Hedging and translation
-
1

-
1



Deferred tax on items of other comprehensive income
-
(5)



Other comprehensive (expense) profit for the period
(65)
25
Total comprehensive (expense) income for the period
(269)
855
Attributable to non-controlling interests
(10)
14
Attributable to shareholders of the Company
(259)
841
consolidated BALANCE SHEET
AS AT 30 SEPTEMBER 2016

Note

30 September 2016
Unaudited
m
31 March
2016
Audited
m
ASSETS




Non-current assets




Investment and development properties
7

9,179
9,643 
Owner-occupied property
7

93
95 



9,272
9,738 
Other non-current assets




Investments in joint ventures and funds
8

3,145
3,353 
Other investments
9

149
142 
Deferred tax assets


3
3 
Interest rate and currency derivative assets
10

255
167 



12,824
13,403 
Current assets




Trading properties
7

323
325 
Debtors


41
33 
Cash and short-term deposits
10

107
114 



471
472 
Total assets


13,295
13,875
LIABILITIES




Current liabilities




Short-term borrowings and overdrafts
10

(416)
(74)
Creditors


(217)
(218)
Corporation tax


(16)
(18)



(649)
(310)
Non-current liabilities




Debentures and loans
10

(3,146)
(3,687)
Other non-current liabilities


(147)
(122)
Interest rate and currency derivative liabilities
10

(172)
(137)



(3,465)
(3,946)
Total liabilities


(4,114)
(4,256)
Net assets


9,181
9,619
EQUITY




Share capital


260
260 
Share premium


1,297
1,295 
Merger reserve


213
213 
Other reserves


(134)
(93)
Retained earnings


7,296
7,667 
Equity attributable to shareholders of the Company


8,932
9,342 
Non-controlling interests


249
277 
Total equity


9,181
9,619 





EPRA NAV per share*
2

891p
919p
* As defined in glossary.
consolidated statement OF CASH FLOWS
For the six months ended 30 September 2016

Note

Six months ended 30 September 2016
Unaudited
m
Six months ended 30 September 20151
Unaudited
m
Rental income received from tenants


241
216
Fees and other income received


31
28
Operating expenses paid to suppliers and employees


(86)
(83)
Cash generated from operations


186
161





Interest paid


(50)
(58)
Interest received


2
-
Corporation tax repayments paid


-
(1)
Distributions and other receivables from joint ventures and funds
8

25
30
Net cash inflow from operating activities


163
132





Cash flows from investing activities




Development and other capital expenditure


(109)
(132)
Purchase of investment properties


(72)
(240)
Sale of investment and trading properties


436
390
Payments received in respect of future trading property sales


4
16
Purchase of investments


(15)
-
Investment in and loans to joint ventures and funds


(27)
(208)
Capital distributions and loan repayments from joint ventures and funds


64
323
Indirect taxes paid in respect of investing activities


(9)
(1)
Net cash inflow from investing activities


272
148





Cash flows from financing activities




Issue of ordinary shares


2
2
Purchase of ordinary shares


(8)
-
Dividends paid


(150)
(116)
Dividends paid to non-controlling interests


(6)
(9)
Acquisition of units in Hercules Unit Trust


(12)
(55)
Closeout of interest rate derivatives


(11)
13
Cash collateral transactions


-
(22)
Decrease in bank and other borrowings


(297)
(369)
Drawdowns on bank and other borrowings


40
11
Drawdown of zero coupon 2015 convertible bond


-
345
Net cash outflow from financing activities


(442)
(200)





Net (decrease) increase in cash and cash equivalents


(7)
80
Cash and cash equivalents at 1 April


114
108
Cash and cash equivalents at 30 September


107
188





Cash and cash equivalents consists of:




Cash and short-term deposits


107
188
1 The prior period comparatives have been restated. See note 1. 
Consolidated Statement of Changes in Equity 
For the six months ended 30 September 2016
Six month movements in equity

Share capital
m
Share premium
m
Hedging and translation reserve
m
Re-
valuation
reserve
m
Merger reserve
m
Retained earnings
m
Total
m
Non-
controlling interests
m
Total
equity
m
Balance at 1 April 2016
260 
1,295 
(107)
14 
213 
7,667 
9,342 
277 
9,619 
Total comprehensive expense for the period
-
-
(36)
(5)
-
(218)
(259)
(10)
(269)
Share issues
-
2
-
-
-
-
2
-
2
Fair value of share and share option awards
-
-
-
-
-
1
1
-
1
Purchase of own shares





(8)
(8)
-
(8)
Purchase of units from non-controlling interests
-
-
-
-
-
-
-
(12)
(12)
Dividends payable in period (14.18p per share)
-
-
-
-
-
(146)
(146)
-
(146)
Dividends paid to non-controlling interests
-
-
-
-
-
-
-
(6)
(6)
Balance at 30 September 2016
260
1,297 
(143)
9
213 
7,296
8,932
249
9,181










Balance at 1 April 2015
258 
1,280 
(76)
(6)
213 
6,563 
8,232 
333 
8,565 
Total comprehensive income for the period
-
-
11
14
-
816
841
14
855
Share issues
1 
13 
-
-
-
(10)
4 
-
4 
Fair value of share and share option awards
-
-
-
-
-
6 
6 
-
6 
Purchase of units from non-controlling interests
-
-
-
-
-
(1)
(1)
(54)
(55)
Dividends payable in period (13.84p per share)
-
-
-
-
-
(141)
(141)
-
(141)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(9)
(9)
Adjustment for scrip dividend element
-
-
-
-
-
28 
28 
-
28 
Balance at 30 September 2015
259 
1,293 
(65)
8 
213 
7,261 
8,969 
284 
9,253 
Prior year movements in equity

Share capital
m
Share premium
m
Hedging and translation reserve
m
Re-
valuation
reserve
m
Merger reserve
m
Retained earnings
m
Total
m
Non-
controlling interests
m
Total
equity
m
Balance at 1 April 2015
258 
1,280 
(76)
(6)
213 
6,563 
8,232 
333 
8,565 
Total comprehensive income for the period
-
-
(31)
20
-
1,344
1,333
19
1,352
Share issues
2 
15 
-
-
-
(12)
5 
-
5 
Fair value of share and share option awards
-
-
-
-
-
8 
8 
-
8 
Loss on purchase of units from
non-controlling interests
-
-
-
-
-
(1)
(1)
-
(1)
Purchase of units from non-controlling interests
-
-
-
-
-
-
-
(59)
(59)
Dividends payable in year (28.00p per share)
-
-
-
-
-
(287)
(287)
-
(287)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(16)
(16)
Adjustment for scrip dividend element
-
-
-
-
-
52 
52 
-
52 
Balance at 31 March 2016
260 
1,295 
(107)
14 
213 
7,667 
9,342 
277 
9,619 
Notes to the accounts
for the six months ended 30 September 2016
1Basis of preparation
The financial information for the period ended 30 September 2016 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2016 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The financial information included in this announcement has been prepared on a going concern basis using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with IAS 34 Interim Financial Reporting. The current period financial information presented in this document has been reviewed, not audited.
The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2016, which have been prepared in accordance with IFRS as adopted by the European Union.
The same accounting policies, estimates, presentation and methods of computation are followed in the half year report as applied in the Group's latest annual audited financial statements.
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period. None of these are expected to have a material impact on the consolidated financial statements of the Group, except the following set out below:
 IFRS 9 - Financial Instruments, will impact both the measurement and disclosures of financial instruments and is effective for the Group's year ending 31 March 2019. The Group has not yet completed its evaluation of the effect of the adoption.
 IFRS 15 - Revenue from contracts with customers, does not apply to gross rental income, but does apply to service charge income, management and performance fees and trading property disposals and is effective for the Group's year ending 31 March 2019. The Group does not expect adoption of IFRS 15 to have a material impact on the measurement of revenue recognition, but additional disclosures will be required with regards to the above sources of income.
 IFRS 16 - Leases, is effective for the Group's year ending 31 March 2020. The Group does not expect adoption of IFRS 16 to have a material impact on the financial statements, since the impacts of the standard for lessors are minimal.
During the year ending 31 March 2016 the accounting for Broadgate Estates, a wholly-owned subsidiary of the Group which acts as a property manager, was reviewed resulting in a reclassification of prior period items presented in the Consolidated Income Statement and Consolidated Statement of Cash Flows.
This reclassification had no impact on either IFRS profit before tax or Underlying Profit. For the six months ended 30 September 2015, this resulted in a 17m increase in other fees and commissions received offset by a 15m increase in other fees and commissions expenses and a 2m increase in administrative expenses.
This reclassification had no impact on the net cash inflow from operating activities presented in the Consolidated Statement of Cash Flows. It resulted in 18m increase in fees and other income received and a 18m increase in operating expenses paid to suppliers and employees.
Having assessed the principal risks discussed on pages 28 - 29, the Directors believe that the Group is well placed to manage its financing and other business risks satisfactorily, and have a reasonable expectation that the Company and the Group have adequate resources to continue in operation for at least 12 months from the signing date of these financial statements. They therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
The interim financial information was approved by the Board on 15 November 2016.
2Performance measures
Earnings per share
The Group measures financial performance with reference to underlying earnings per share, the European Public Real Estate Association (EPRA) earnings per share and IFRS earnings per share. The relevant earnings and weighted average number of shares (including dilution adjustments) for each performance measure are shown below, and a reconciliation between these is shown within the supplementary disclosures (Table B).
EPRA earnings per share is calculated using EPRA earnings, which is the IFRS profit after taxation attributable to shareholders of the Company excluding investment and development property revaluations, gains/losses on investing and trading property disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. In the current period, diluted EPRA earnings per share did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS diluted earnings per share includes the dilutive impact as IAS 33 ignores this hurdle to conversion. In the prior year period, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.
Underlying earnings per share is calculated using Underlying Profit adjusted for underlying taxation (see note 6). Underlying Profit is the pre-tax EPRA earnings measure, with additional Company adjustments. No Company adjustments were made in either the current or prior period. 

Six months ended 30 September 2016

Six months ended 30 September 2015

Relevant
earnings
m
Relevant 
number
of shares
million
Earnings
per share
pence

Relevant
earnings
m
Relevant
number
of shares
million
Earnings
per share
pence
Underlying







Underlying basic
199
1,029
19.3

171 
1,022 
16.7 
Underlying diluted
199
1,033
19.3

174 
1,086 
16.0 
EPRA







EPRA basic
199
1,029
19.3

171 
1,022 
16.7 
EPRA diluted
199
1,033
19.3

174 
1,086 
16.0 
IFRS







Basic
(195)
1,029
(19.0)

816 
1,022 
79.8 
Diluted
(221)
1,091
(20.3)

819 
1,086 
75.4 
Net asset value
The Group measures financial position with reference to EPRA net asset value (NAV) per share and EPRA triple net asset value (NNNAV) per share. The net asset value and number of shares for each performance measure is shown below. A reconciliation between IFRS net assets and EPRA net assets, and the relevant number of shares for each performance measure, is shown within the supplementary disclosures (Table B). EPRA net assets is a proportionally consolidated measure that is based on IFRS net assets excluding the mark-to-market on effective cash flow hedges and related debt adjustments, the mark-to-market on the convertible bonds as well as deferred taxation on property and derivative valuations. They include the valuation surplus on trading properties and are adjusted for the dilutive impact of share options. 
As at 30 September 2016, EPRA NAV and NNNAV did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS net assets includes the dilutive impact following the treatment of IFRS earnings per share. In the prior year period, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.

30 September 2016

31 March 2016

Relevant
net assets
m
Relevant
number
of shares
million
Net asset
value per
share
pence

Relevant
net assets
m
Relevant
number
of shares
million
Net asset
value per
share
pence
EPRA







EPRA NAV
9,254
1,039
891

10,074 
1,096 
919 
EPRA NNNAV
8,623
1,039
830

9,640 
1,096
880 
IFRS







Basic
9,181
1,030
891

9,619 
1,029 
935 
Diluted
9,581
1,097
873

10,019 
1,096
914 
Total accounting return
The Group also measures financial performance with reference to total accounting return. This is calculated as the increase in EPRA net asset value per share and dividend paid in the year as a percentage of the EPRA net asset value per share at the start of the period.

Six months ended 30 September 2016

Six months ended 30 September 2015

Decrease in NAV per share
pence
Dividend per share paid
pence
Total
accounting
return

Increase in NAV per share 
pence
Dividend per 
share paid
pence
Total
accounting
return
Total accounting return
(28)
14.18
(1.5%)

62
13.84
9.1%
3Revenue and costs

Six months ended 
30 September 2016

Six months ended 1
30 September 2015

Underlying
m
Capital
and other
m
Total
m

Underlying
m
Capital
and other
m
Total
m
Rent receivable
226
-
226

218 
-
218 
Spreading of tenant incentives and guaranteed rent increases
(4)
-
(4)

10 
-
10 
Surrender premia
2
-
2

2 
-
2 
Gross rental income
224
-
224

230
-
230
Trading property sales proceeds
-
9
9

-
15 
15 
Service charge income
40
-
40

41 
-
41 
Management and performance fees
(from joint ventures and funds)
3
-
3

3 
-
3 
Other fees and commissions
21
-
21

19 
-
19 
Revenue
288
9
297

293
15
308








Trading property cost of sales
-
(6)
(6)

-
(7)
(7)
Service charge expenses
(40)
-
(40)

(41)
-
41 
Property operating expenses
(10)
-
(10)

(13)
-
13 
Other fees and commissions expenses
(17)
-
(17)

(15)
-
15 
Costs
(67)
(6)
(73)

(69)
(7)
(76)

221
3
224

224
8
232
1 The prior period comparatives have been restated. See note 1.
4Valuation movements on property

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Consolidated income statement


Revaluation of properties
(257)
397
Revaluation of properties held by joint ventures and funds accounted for using the equity method
(205)
217

(462)
614
Consolidated statement of comprehensive income


Revaluation of owner-occupied properties
(2)
12

(464)
626
5Net financing costs

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Underlying
 
Financing charges


Bank loans, overdrafts and derivatives
(18)
(20)
Other loans
(28)
(46)
Obligations under head leases
(1)
(1)

(47)
(67)
Development interest capitalised
4
5

(43)
(62)
Financing income


Deposits, securities and liquid investments
2
1
Loans to joint ventures
-
2

2
3
Net financing charges - underlying
(41)
(59)



Capital and other





Financing charges


Valuation movements on translation of foreign currency debt
-
2
Hedging reserve recycling
-
(2)
Valuation movements on fair value debt
(88)
5
Valuation movements on fair value derivatives
90
(4)
Recycling of fair value movement on close-out of derivatives
(10)
(5)
Capital financing costs
(5)
(6)
Fair value movement on non-hedge accounted derivatives 
(4)
-

(17)
(10)
Financing income


Fair value movement on convertible bonds 
32
4

32
4
Net financing income (charges) - capital
15
(6)






Total financing income
34
7
Total financing charges
(60)
(72)
Net financing costs
(26)
(65)
Interest on development expenditure is capitalised at the Group's weighted average interest rate of 2.5% (Six months ended 30 September 2015: 3.1%). The weighted average interest rate on a proportionately consolidated basis at 30 September 2016 was 3.2% (Six months ended 30 September 2015: 3.6%).
6Taxation

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Taxation income 


Current taxation


Current period UK corporation taxation (30 September 2016: 19%; 30 September 2015: 20%)
1
2
Adjustments in respect of prior periods
-
-
Total current taxation income 
1
2
Deferred taxation on revaluations and derivatives
-
5
Group total taxation
1
7
Attributable to joint ventures and funds
-
-
Total taxation income
1
7
Taxation expense attributable to Underlying Profits for the six months ended 30 September 2016 was nil (Six months ended 30 September 2015: nil).


7Property
Property reconciliation

Six months ended 30 September 2016

Year ended 31 March 2016 

Investment and development properties
Level 3
m 
Trading properties
m 
Owner-occupied
Level 3
m 
Total
m 

Investment and development properties
Level 3
m 
Trading properties
m 
Owner-occupied
Level 3
m 
Total
m 
Carrying value at the start of the
period/year
9,643
325
95
10,063

9,120
274
60
9,454
Additions









- property purchases
74
-
-
74

238
-
-
238
- development expenditure
48
28
-
76

54
59
-
113
- capitalised interest and staff costs
3
3
-
6

4
5
-
9
-
capital expenditure on asset management initiatives
28
-
-
28

116
-
-
116

153
31
-
184

412
64
-
476
Depreciation
-
-
-
-

-
-
(1)
(1)
Disposals
(363)
(6)
-
(369)

(509)
(11)
-
(520)
Reclassifications
27
(27)
-
-

(15)
(2)
17
-
Revaluations included in income statement
(257)
-
-
(257)

616
-
-
616
Revaluations included in OCI
-
-
(2)
(2)

-
-
19
19
Movement in tenant incentives and contracted rent uplift balances
(24)
-
-
(24)

19
-
-
19
Carrying value at the end of the period/year
9,179
323
93
9,595

9,643
325
95
10,063
Plus: surplus on trading properties



75




85
Less: head lease liabilities



(47)




(37)
Total Group property portfolio valuation
at the end of the period/year



9,623




10,111
Non-controlling interests



(302)




(324)
Total Group property portfolio valuation
at the end of the period/year attributable
to shareholders



9,321




9,787
The Group's total property portfolio was valued by external valuers on the basis of fair value, in accordance with the RICS valuation - Professional Standards 2014, ninth edition, published by The Royal Institute of Chartered Surveyors. The information provided to the valuers, and the assumptions and valuations models used by the valuers are reviewed by the property portfolio team, the Head of Offices, the Head of Retail and the Chief Financial Officer. The valuers meet with the external auditors and also present directly to the Audit Committee on a half yearly basis.
Property valuations are inherently subjective as they are made on the basis of significant unobservable inputs, including assumptions made by the valuer which may not prove to be accurate. For these reasons, and consistent with EPRA's guidance, we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. There were no transfers between levels in the period. Inputs to the valuation, including equivalent yields, rental values and costs to complete, are 'unobservable' as defined by IFRS 13. The tables within the supplementary tables section set out the market value, yield and estimated rental values of the Group's properties split by relevant sector
On 23 June 2016 the UK electorate voted to leave the European Union. Since the referendum, the external valuers have monitored market transactions and market sentiment in arriving at their opinion of fair value. There is still a shortage of comparable evidence of arm's length transactions, resulting in the valuers exercising a greater degree of judgement than would be applied under more liquid market conditions.
Additional property covenant information
Properties valued at 1,880m (year ended 31 March 2016: 2,559m) were subject to a security interest and other properties of non-recourse companies amounted to 1,181m (year ended 31 March 2016: 1,244), totalling 3,061m (year ended 31 March 2016: 3,803m).


8Joint ventures and funds
Summary movement for the period of the investments in joint ventures and funds

Joint ventures
m
Funds
m
Total
m

Equity
m
Loans
m
Total
m
At 1 April 2016
3,109
244
3,353

2,851
502
3,353
Additions
34
2
36

36
-
36
Disposals
(26)
-
(26)

-
(26)
(26)
Share of loss after taxation
(123)
(8)
(131)

(131)
-
(131)
Distributions and dividends:







- Capital
(32)
(6)
(38)

(38)
-
(38)
- Revenue
(45)
-
(45)

(45)
-
(45)
Hedging and exchange movements
(3)
(1)
(4)

(4)
-
(4)
At 30 September 2016
2,914
231
3,145

2,669
476
3,145
Additional investments in joint ventures and funds covenant information
At 30 September 2016 the investments in joint ventures included within the total investments in joint ventures and funds was 3,140m (31 March 2016: 3,348m), being the 3,145m (31 March 2016: 3,353m) total investment shown above, less the net investment of 5m (31 March 2016: 5m) in PREF, a property fund in continental Europe.
Summary income statement for the period of the investments in joint ventures and funds

Six months ended
30 September 2016
Six months ended
30 September 2015 

m
100% 
m
BL Share 
m
100% 
m
BL Share 
Revenue
280
141
266
133
Costs
(64)
(33)
(56)
(28)

216
108
210
105
Administrative expenses
(3)
(2)
(2)
(1)
Net financing costs
(75)
(38)
(81)
(41)
Underlying Profit before taxation
138
68
127
63



-
-
Valuation movement
(408)
(205)
431
217
Capital financing costs
(12)
(6)


Profit on disposal of investment properties, trading properties and investments
23
12
4
2
(Loss) profit on ordinary activities before taxation
(259)
(131)
562
282





Taxation
-
-
(1)
-
(Loss) profit on ordinary activities after taxation
(259)
(131)
561
282





(Loss) profit split between controlling and non-controlling interests




Attributable to non-controlling interests

(2)

(2)
Attributable to shareholders of the Company

(133)

280
Operating cash flows of joint ventures and funds (Group share)

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Rental income received from tenants
96
102
Fees and other income received
-
1
Operating expenses paid to suppliers and employees
(10)
(9)
Cash generated from operations
86
94
Interest paid
(41)
(44)
UK corporation tax paid
-
(3)
Cash inflow from operating activities
45
47
Cash inflow from operating activities deployed as:


Surplus cash retained within joint ventures and funds
20
17
Revenue distributions per consolidated statement of cash flows
25
30
Revenue distributions split between controlling and non-controlling interests


Attributable to non-controlling interests
2
2
Attributable to shareholders of the Company
23
28
9Other investments

30 September 2016
m
31 March
2016
m
Investment held for trading
93
101
Loans, receivables and other
56
41

149
142
The investment held for trading comprises interests as a trust beneficiary. The trusts' assets comprise freehold reversions in a pool of commercial properties, comprising Sainsbury's superstores. The interest was categorised as Level 3 in the fair value hierarchy, is subject to the same inputs as those disclosed in note 7, and its fair value was determined by the Directors, supported by an external valuation.
10Net debt
10.1 Fair value and book value of net debt

30 September 2016

31 March 2016

Fair value
m
Book value
m
Difference
m

Fair value
m
Book value
m
Difference
m
Debentures and unsecured bonds
1,783
1,696
87

1,637
1,613
24
Convertible bonds
747
747
-

779
779
-
Bank debt and other floating rate debt
1,130
1,119
11

1,384
1,369
15
Gross debt
3,660
3,562
98

3,800
3,761
39
Interest rate and currency derivative liabilities
172
172
-

137
137
-
Interest rate and currency derivative assets
(255)
(255)
-

(167)
(167)
-
Cash and short-term deposits
(107)
(107)
-

(114)
(114)
-
Net debt
3,470
3,372
98

3,656
3,617
39
Net debt attributable to non-controlling interests
(106)
(104)
(2)

(106)
(104)
(2)
Net debt attributable to shareholders of the Company
3,364
3,268
96

3,550
3,513
37
The fair values of debt, debentures and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and loan notes have been valued assuming they could be renegotiated at contracted margins. The derivatives have been valued by calculating the present value of expected future cash flows, using appropriate market discount rates, by an independent treasury advisor. Short-term debtors and creditors and other investments (see note 9) have been excluded from the disclosures on the basis that the fair value is equivalent to the book value.
10.2 Loan to value
Group loan to value (LTV) 

30 September
2016
m
31 March
2016
m
Group loan to value (LTV)
24.6%
25.2%



Principal value of gross debt
3,297
3,552 
Less debt attributable to non-controlling interests
(107)
(109)
Less cash and short-term deposits (balance sheet)
(107)
(114)
Plus cash attributable to non-controlling interests
5
8 
Total net debt for LTV calculation
3,088
3,337 
Group property portfolio valuation (note 7)
9,623 
10,111 
Investments in joint ventures and funds (note 8)
3,145
3,353 
Other investments (note 9)
149
142 
Less property and investments attributable to non-controlling interests
(355)
(384)
Total assets for LTV calculation
12,562
13,222 
Proportionally consolidated loan to value (LTV)

30 September
2016
m
31 March
2016
m
Proportionally consolidated loan to value (LTV)
31.6%
32.1%



Principal value of gross debt
4,928
5,217
Less attributable to non-controlling interests
(124)
(128)
Less cash and short-term deposits 
(368)
(353)
Plus cash attributable to non-controlling interests
7
9
Total net debt for proportional LTV calculation
4,443
4,745
Group property portfolio valuation (note 7)
9,623
10,111
Share of property of joint ventures and funds 
4,666
4,937
Other investments (note 9)
149
142
Less other investments attributable to joint ventures and funds
(3)
(4)
Less property attributable to non-controlling interests
(371)
(400)
Total property for proportional LTV calculation
14,064
14,786
10.3 British Land Unsecured Financial Covenants
The two financial covenants applicable to the Group unsecured debt including convertible bonds are shown below:

30 September
2016
m
31 March
2016
m
Net Borrowings not to exceed 175% of Adjusted Capital and Reserves
33%
34%



Principal amount of gross debt
3,297 
3,552 
Less the relevant proportion of borrowings of the partly-owned subsidiary / non-controlling interests
(107)
(109)
Less cash and deposits (balance sheet)
(107)
(114)
Plus the relevant proportion of cash and deposits of the partly-owned subsidiary / non-controlling interests
5 
8 
Net Borrowings
3,088
3,337 
Share capital and reserves (balance sheet)
9,181
9,619 
EPRA deferred tax adjustment (EPRA Table A)
2
5 
Trading property surpluses (EPRA Table A)
76 
93 
Exceptional refinancing charges (see below)
281 
287 
Fair value adjustments of financial instruments (EPRA Table A)
205
198 
Less reserves attributable to non-controlling interests (balance sheet)
(249)
(277)
Adjusted Capital and Reserves
9,496
9,925 
In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of 281m (31 March 2016: 287m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.

30 September
2016
m
31 March
2016
m
Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets
29%
29%



Principal amount of gross debt
3,297 
3,552 
Less cash and deposits not subject to a security interest (being 89m less the relevant proportion of cash and deposits of the partly owned subsidiary of 2m)
(87)
(88)
Less principal amount of secured and non-recourse borrowings
(1,278)
(1,563)
Net Unsecured Borrowings
1,932 
1,901 
Properties (note 7)
9,623
10,111 
Investments in joint ventures and funds (note 8)
3,145
3,353 
Other investments (note 9)
149
142 
Less investments in joint ventures (note 8)
(3,140)
(3,348)
Less encumbered assets (note 7)
(3,061)
(3,803)
Unencumbered Assets
6,716
6,455 
10.4 Convertible bonds
1.5% Convertible bond 2012 (maturity 2017)
On 10 September 2012 British Land (Jersey) Limited (the Issuer), a wholly-owned subsidiary of the Group, issued 400 million 1.5% guaranteed convertible bonds due 2017 (the 2012 bonds) at par. The 2012 issuer is fully guaranteed by the Company in respect of the 2012 bonds. 
Subject to their terms, the 2012 bonds are convertible into preference shares of the Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. Bondholders may exercise their conversion right at any time up to (but excluding) the 20th dealing day before 10 September 2017 (the maturity date).
The initial exchange price was 693.07 pence per ordinary share. The exchange price is adjusted based on certain events.
From 25 September 2015, the Company has the option to redeem the 2012 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2012 bonds have been converted, redeemed, or purchased and cancelled. The 2012 bonds will be redeemed at par on 10 September 2017 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled. No redemption of the bonds occurred in the period.
0% Convertible bond 2015 (maturity 2020)
On 9 June 2015 British Land (White) 2015 Limited (the 2015 Issuer), a wholly owned subsidiary of the Group, issued 350 million zero coupon guaranteed convertible bonds due 2020 (the 2015 bonds) at par. The 2015 Issuer is fully guaranteed by the Company in respect of the 2015 bonds.
Subject to their terms, the 2015 bonds are convertible into preference shares of the Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. From 20 July 2015 up to and including 29 June 2018, a bondholder may exercise its conversion right if the share price has traded at a level exceeding 130% of the exchange price for a specified period. Thereafter, and up to but excluding the 7th dealing day before 9 June 2020 (the maturity date), a bondholder may convert at any time.
The initial exchange price was 1103.32 pence per ordinary share. The exchange price is adjusted based on certain events (such as the Company paying dividends in any year above 14.18 pence per ordinary share).
From 30 June 2018, the Company has the option to redeem the 2015 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2015 bonds have been converted, redeemed, or purchased and cancelled. The 2015 bonds will be redeemed at par on 9 June 2020 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled.
10.5 Fair value hierarchy
The table below analyses financial instruments carried at fair value, by the valuation method. The different levels are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

30 September 2016

31 March 2016

Level 1
m
Level 2
m
Level 3
m
Total
m

Level 1
m
Level 2
m
Level 3
m
Total
m
Interest rate and currency derivative assets
-
(255)
-
(255)

-
(167)
-
(167)
Other investments - available for sale 
(14)
-
-
(14)

-
-
-
-
Other investments - held for trading
-
-
(93)
(93)

-
-
(101)
(101)
Assets
(14)
(255)
(93)
(362)

-
(167)
(101)
(268)
Interest rate and currency derivative liabilities
-
172
-
172

-
137
-
137
Convertible bonds
747
-
-
747

779
-
-
779
Liabilities
747
172
-
919

779
137
-
916
Total
733
(83)
(93)
557

779
(30)
(101)
648
There have been no transfers between levels in the period. An 8m valuation loss in relation to the investment held for trading has been recorded in the six months ended 30 September 2016 (30 September 2015: 3m valuation gain). Further disclosures in relation to the valuation of the investment held for trading are included within note 9.
11Dividend
The 2017 second quarter dividend of 7.30 pence per share, totalling 75m, is payable on 10 February 2017 to shareholders on the register at close of business on 6 January 2017.
The Board will announce the availability of the Scrip Dividend Alternative, if available, via the Regulatory News Service and on its website (www.britishland.com/dividends), no later than 4 business days before the ex-dividend date of 5 January 2017. The Board expects to announce the split between Property Income Distributions ('PID') and non-PID income at that time. Any Scrip Dividend Alternative will not be enhanced. PID dividends are paid, as required by REIT legislation, after deduction of withholding tax at the basic rate (currently 20%), where appropriate. Certain classes of shareholders may be able to elect to receive dividends gross. Please refer to our website (www.britishland.com) for details.
The 2017 first quarter dividend of 7.30 pence per share, totalling 75m was paid on 11 November 2016. The whole of the first quarter dividend was a PID and no scrip alternative was offered. 63m was paid to shareholders, and 10m of withholding tax was retained.
The Consolidated Statement of Changes in Equity shows total dividends in the six months to 30 September 2016 of 146m, 73m being the third quarter 2016 dividend of 7.09 pence per share paid on 6 May 2016, and the fourth quarter 2016 dividend of 7.09 pence per share, paid on 5 August, totalling 73m. No scrip alternatives were offered for the third or fourth quarters. The whole of the third quarter dividend was a PID, and half of the fourth quarter dividend was a PID.


12Segment information

Operating segments
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its three principal sectors are Offices and residential, Retail and leisure and Canada Water. The Office sector includes residential, as this is often incorporated into Office schemes, and Retail includes leisure, for a similar rationale. Canada Water was added as a principal sector in the year ended 31 March 2016, reflecting the key role the campus has in the strategy of the Group. Consequently the prior period comparatives in this note have been restated to reflect this additional principal sector. There is no impact on the total figures disclosed for the prior period.
The relevant gross rental income, net rental income, operating result and property assets, being the measures of segment revenue, segment result and segment assets used by the management of the business, are set out below. Management reviews the performance of the business principally on a proportionally consolidated basis, which includes the Group's share of joint ventures and funds on a line-by-line basis and excludes non-controlling interests in the Group's subsidiaries. The chief operating decision maker for the purpose of segment information is the Executive Committee.
Gross rental income is derived from the rental of buildings. Operating result is the net of net rental income, fee income and administrative expenses. No customer exceeded 10% of the Group's revenues in either period.
Segment result

Six months ended 30 September

Offices and residential

Retail and leisure

Canada Water

Other/unallocated

Total

2016
m
2015
m

2016
m
2015
m

2016
m
2015
m

2016
m
2015
m

2016
m
2015
m
Gross rental income














British Land Group
70
66

142
150

5
3

-
-

217
219
Share of joint ventures and funds
60
54

50
51

-
-

-
2

110
107
Total
130
120

192
201

5
3

-
2

327
326















Net rental income














British Land Group
67
61

136
142

4
3

-
-

207
206
Share of joint ventures and funds
58
52

47
49

-
-

-
2

105
103
Total
125
113

183
191

4
3

-
2

312
309















Operating result














British Land Group
66
51

129
133

3
3

(26)
(26)

172
161
Share of joint ventures and funds
56
54

49
50

-
-

-
2

105
106
Total
122
105

178
183

3
3

(26)
(24)

277
267












Reconciliation to Underlying Profit before taxation










Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Operating result












277
267 
Net financing costs












(78)
(96)
Underlying Profit












199
171 
Reconciliation to profit on ordinary activities before taxation














Underlying Profit












199
171 
Capital and other












(411)
644 
Underlying Profit attributable
to non-controlling interests












7
8 
Total (loss) profit on ordinary activities before taxation











(205)
823 
Of the gross rental income above, nil (six months ended 30 September 2015: 2m) was derived from outside the UK.
Segment assets 

Offices and residential

Retail and leisure

Canada Water

Total

30 September 2016
m
31 March 2016
m

30 September 2016
m
31 March 2016
m

30 September 2016
m
31 March 2016
m

30 September 2016
m
31 March 2016
m
Property assets











British Land Group
4,143
4,181

4,889
5,323

289
283

9,321 
9,787 
Share of funds and joint ventures
2,676
2,843

1,922
2,018

-
-

4,598
4,861 
Total
6,819
7,024

6,811
7,341

289
283

13,919 
14,648 
Reconciliation to net assets









British Land Group









30 September 2016
m
31 March 2016
m
Property assets









13,919 
14,648 
Other non-current assets









146 
138 
Non-current assets









14,065
14,786 












Other net current liabilities









(247)
(257)
Adjusted net debt









(4,463)
(4,765)
Other non-current liabilities









(101)
(90)
EPRA net assets (undiluted)








9,254 
9,674 
Convertible dilution








-
400
EPRA net assets (diluted)








9,254 
10,074 
Non-controlling interests








249
277 
EPRA adjustments








(322)
(732)
Net assets








9,181
9,619 
13Related party transactions
There have been no material changes in the related party transactions described in the last annual report.
14Contingent liabilities
The Group, joint ventures and funds have contingent liabilities in respect of legal claims, guarantees and warranties arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities.
15Share capital and reserves


m
Ordinary shares
of 25p each
Issued, called and fully paid


At 1 April 2016
260
1,040,562,323
Issues
-
357,689
At 30 September 2016
260
1,040,920,012
At 30 September 2016, of the issued 25p ordinary shares, 2,685 shares were held in the ESOP trust (31 March 2016: 627), 11,266,245 shares were held as treasury shares (31 March 2016: 11,266,245 ) and 1,029,651,082 shares were in free issue (31 March 2016: 1,029,295,451). No treasury shares were acquired by the ESOP trust during the year. All issued shares are fully paid. 
SUPPLEMENTARY DISCLOSURES
UNAUDITED
Table A: Summary income statement and balance sheet
Summary income statement based on proportional consolidation for the six months ended 30 September 2016
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with its share of the results of joint ventures and funds included on a line by line basis and excluding non-controlling interests. 

Six months ended 30 September 2016

Six months ended 30 September 2015

Group
m
Joint ventures and funds
m
Less non-controlling interests
m
Proportionally consolidated
m

Group
m
Joint ventures and funds
m
Less non-controlling interests
m
Proportionally consolidated
m
Gross rental income
224
113
(10)
327

230
110
(14)
326
Property operating expenses
(10)
(5)
-
(15)

(13)
(5)
1
(17)
Net rental income
214
108
(10)
312

217
105
(13)
309










Administrative expenses
(42)
(2)
1
(43)

(49)
(1)
1
(49)
Net fees and other income
7
-
1
8

7
-
-
7
Ungeared Income Return
179
106
(8)
277

175
104
(12)
267










Net financing costs
(41)
(38)
1
(78)

(59)
(41)
4
(96)
Underlying Profit 
138
68
(7)
199

116
63
(8)
171
Underlying taxation
-
-
-
-

-
-
-
-
Underlying Profit after taxation
138
68
(7)
199

116
63
(8)
171
Valuation movement



(462)




642
Other capital and taxation (net)1



(411)




3
Capital and other



(873)




645
Total return



(674)




816
1 Includes other comprehensive income, movement in dilution of share options and the movement in items excluded for EPRA NAV.
Summary balance sheet based on proportional consolidation as at 30 September 2016
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with its share of the results of joint ventures and funds included on a line-by-line basis and excluding non-controlling interests.

Group
m
Share of joint ventures
& funds
m
Less non-controlling interests
m
Share
options
m
Deferred
tax
m
Mark-to-market on effective cash flow hedges and related debt adjustments
m
Head
leases
m

Valuation surplus on trading properties
m
EPRA Net assets 
30 September 2016
m
EPRA Net assets
31 
March
2016
m
Retail properties
5,213
2,007
(371)
-
-
-
(38)

-
6,811
7,341
Office properties
4,084
2,675
-
-
-
-
(16)

76
6,819
7,024
Canada Water properties
298
-
-
-
-
-
(9)

-
289
283
Total properties
9,595
4,682
(371)
-
-
-
(63)

76
13,919
14,648
Investments in joint ventures and funds
3,145
(3,145)
-
-
-
-
-

-
-
-
Other investments
149
(3)
-
-
-
-
-

-
146
138
Other net (liabilities) assets
(336)
(119)
3
39
2
-
63

-
(348)
(347)
Net debt
(3,372)
(1,415)
119
-
-
205
-

-
(4,463)
(4,765)
Dilution due to 1.5% convertible bond
-
-
-
-
-
-
-

-
-
400
Net assets
9,181
-
(249)
39
2
205
-

76
9,254
10,074
EPRA NAV per share (note 2)









891p
919p

30 September 2016

31 March 2016

m
Pence per share

m
Pence per share
Opening EPRA NAV
10,074
919

9,035
829
Income return
199
18

365
34
Capital return
(473)
(43)

909
77
Dividend paid
(146)
(13)

(235)
(21)
Remove dilution of 1.5% convertible bond
(400)
10

-
-
Closing EPRA NAV
9,254
891

10,074
919
Table B: EPRA Performance measures
EPRA Performance measures summary table

Six months ended
30 September 2016

Six months ended
30 September 2015

m
Pence per share

m
Pence per share
EPRA Earnings 
- basic
199
19.3

171
16.7

- diluted
199
19.3

174
16.0
EPRA Net Initial Yield

4.3%


4.1%
EPRA 'topped-up' Net Initial Yield 

4.7%


4.6%
EPRA Vacancy Rate 

2.7%


2.6%

30 September 2016

31 March 2016

Net assets m
Net asset
value per share pence

Net assets m
Net asset
value per share pence
EPRA NAV

9,254
891

10,074 
919 
EPRA NNNAV

8,623
830

9,640 
880 
Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
(Loss) profit attributable to the shareholders of the Company
(195)
816
Exclude:


Group - taxation
(1)
(7)
Group - valuation movement
257
(397)
Group - profit on disposal of investment properties and investments
(27)
(26)
Group - profit on disposal of trading properties
(3)
(8)
Joint ventures and funds - valuation movement (including result on disposals) 
193
(219)
Joint ventures and funds - capital financing costs
6
-
Changes in fair value of financial instruments and associated close-out costs
(15)
6
Non-controlling interests in respect of the above
(16) 
6
EPRA earnings - basic
199
171
Dilutive effect of 1.5% convertible bond
-
3
EPRA earnings - diluted
199
174



(Loss) profit attributable to the shareholders of the Company
(195)
816
Dilutive effect of 1.5% convertible bond
(26)
3
IFRS earnings - diluted
(221)
819

Six months ended 30 September 2016
Number
million
Six months ended 30 September 2015
Number
million
Weighted average number of shares
1,040
1,033
Adjustment for Treasury shares
(11)
(11)
IFRS/EPRA weighted average number of shares (basic)
1,029
1,022
Dilutive effect of share options
1
2
Dilutive effect of ESOP shares
3
4
Dilutive effect of 1.5% convertible bond
58
58
IFRS weighted average number of shares (diluted)
1,091
1,086
Remove dilutive effect of 1.5% convertible bond
(58)
-
EPRA weighted average number of shares (diluted)
1,033
1,086
Net assets per share 

30 September 2016

31 March 2016

m
Pence
per share

m
Pence
per share
Balance sheet net assets
9,181


9,619 

Deferred tax arising on revaluation movements
2


5 

Mark-to-market on effective cash flow hedges and related debt adjustments
205


198 

Dilution effect of share options
39


36 

Surplus on trading properties
76


93 

1.5% convertible bond adjustment
-


400 

Less non-controlling interests
(249)


(277)

EPRA NAV
9,254
891

10,074 
919 
Deferred tax arising on revaluation movements
(15)


(24)

Mark-to-market on effective cash flow hedges and related debt adjustments
(205)


(153)

Mark-to-market on debt
(411)


(257)

EPRA NNNAV 
8,623
830

9,640 
880 
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of the debt and derivatives and to include the deferred taxation on revaluations
and derivatives.

30 September 2016
Number
million
31 March
2016
Number
million
Number of shares at period/year end
1,041
1,040 
Adjustment for treasury shares
(11)
(11)
IFRS/EPRA Number of shares (basic)
1,030
1,029 
Dilutive effect of share options
3
2 
Dilutive effect of ESOP shares
6
7 
Dilutive effect of 1.5% convertible bond
58
58 
IFRS number of shares (diluted)
1,097
1,096 
Remove dilutive effect of 1.5% convertible bond
(58)
-
EPRA number of shares (diluted)
1,039
1,096 
EPRA Net Initial Yield and 'topped-up' Net Initial Yield

30 September 2016
m
30 September
2015
m
Investment property - wholly-owned
9,321 
9,569 
Investment property - share of joint ventures and funds
4,598 
4,815 
Less developments, residential and land
(951)
(805)
Completed property portfolio
12,968 
13,579 
Allowance for estimated purchasers' costs
914 
846 
Gross up completed property portfolio valuation
13,882 
14,425 
Annualised cash passing rental income
610 
594 
Property outgoings
(9)
(8)
Annualised net rents
601 
586 
Rent expiration of rent-free periods and fixed uplifts1
50 
76 
'Topped-up' net annualised rent
651 
662 
EPRA Net Initial Yield
4.3%
4.1%
EPRA 'topped-up' Net Initial Yield
4.7%
4.6%
Including fixed/minimum uplifts received in lieu of rental growth
16 
25 
Total 'topped-up' net rents
667 
687 
Overall 'topped-up' Net Initial Yield
4.8%
4.8%
'Topped-up' net annualised rent
651 
662 
ERV vacant space
19 
18 
Reversions
31 
25 
Total ERV
701 
705 
Net Reversionary Yield
5.0%
4.9%
1 The weighted average period over which rent-free periods expire is 1 year (30 September 2015: 1 year).
The above is stated for the UK portfolio only.
EPRA Net Initial Yield (NIY) basis of calculation
EPRA NIY is calculated as the annualised net rent (on a cash flow basis), divided by the gross value of the completed property portfolio. The valuation of our completed property portfolio is determined by our external valuers as at 30 September 2016, plus an allowance for estimated purchaser's costs. Estimated purchaser's costs are determined by the relevant stamp duty liability, plus an estimate by our valuers of agent and legal fees on notional acquisition. The net rent deduction allowed for property outgoings is based on our valuers' assumptions on future recurring non-recoverable revenue expenditure. 
In calculating the EPRA 'topped-up' NIY, the annualised net rent is increased by the total contracted rent from expiry of rent-free periods and
future contracted rental uplifts where defined as not in lieu of growth. Overall 'topped-up' NIY is calculated by adding any other contracted future uplift to the 'topped-up' net annualised rent. 
The net reversionary yield is calculated by dividing the total estimated rental value (ERV) for the completed property portfolio, as determined
by our external valuers, by the gross completed property portfolio valuation.
The EPRA vacancy rate is calculated as the ERV of the un-rented, lettable space as a proportion of the total rental value of the completed
property portfolio.
EPRA Vacancy Rate

30 September 2016
m
30 September
2015
m
Annualised potential rental value of vacant premises
19 
18 
Annualised potential rental value for the completed property portfolio
710
708 
EPRA Vacancy Rate
2.7%
2.6%
The above is stated for the UK portfolio only.


EPRA Cost Ratios

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Property operating expenses
10
12
Administrative expenses
41
48
Share of joint ventures and funds expenses
7
6
Less:
Performance & management fees (from joint ventures & funds)
(4)
(3)

Other fees and commission
(4)
(4)

Ground rent costs
(1)
(1)
EPRA Costs (including direct vacancy costs) (A)
49
58
Direct vacancy costs
(6)
(5)
EPRA Costs (excluding direct vacancy costs) (B)
43
53



Gross Rental Income less ground rent costs
215
218
Share of joint ventures and funds (Gross Rental Income less ground rent costs)
111
107
Total Gross Rental Income (C)
326
325



EPRA Cost Ratio (including direct vacancy costs) (A/C)
15.0%
17.8%
EPRA Cost Ratio (excluding direct vacancy costs) (B/C)
13.2%
16.3%



Overhead and operating expenses capitalised (including share of joint ventures and funds)
2
2
In the current and prior periods employee costs in relation to staff time on development projects are capitalised into the base cost of relevant development assets.
Table C: Gross rental income

Six months ended 30 September 2016
m
Six months ended 30 September 2015
m
Rent receivable
317
304
Spreading of tenant incentives and guaranteed rent increases
8
20 
Surrender premia
2
2 
Gross rental income
327
326
The current and prior period information is presented on a proportionally consolidated basis, excluding non-controlling interests.
Table D: Property related capital expenditure

Six months ended 30 September 2016

Year ended 31 March 2016

Group
Joint
ventures
and funds
Total

Group
Joint
ventures
and funds
Total
Acquisitions
74
-
74

238
-
238
Development
72
11
83

104
58
162
Like-for-like portfolio
35
23
58

99
6
105
Other
9
1
10

25
15
40
Total property related capex
190
35
225

466
79
545
The above is presented on a proportionally consolidated basis, excluding non-controlling interests and business combinations. The 'Other' category contains amounts owing to tenant incentives of 4m (31 March 2016: 27m), capitalised staff costs of 2m (31 March 2016: 4m) and capitalised interest of 4m (31 March 2016: 9m).



This information is provided by RNS
The company news service from the London Stock Exchange
  END
IR FFUESIFMSEIF